Condominium purchases can be different from single family home purchases. There are more factors to evaluate. This blog provides condominium purchasing tips for MA home buyers.
Definition of a Condo
Condos are buildings with two or more units with shared common areas such as land and hallways. Shared components belong to the association and every owner has a percentage interest. The exact share is normally based on total number of units. Condo owners must maintain the interior of their own unit but share the expense of common areas such as land. Due to the common elements and expenditures, it is important for MA buyers to review certain paperwork ahead of time.
Information You Need to Know
Using Different Loan Programs
Financing programs will restrict loans to units in qualified complexes or based on specific criteria. For example, FHA requires specific owner occupancy percentages, satisfactory reserves, and a variety of other items. Condo complexes that cannot obtain FHA approval will be more difficult to sell. Buyers intending to use FHA should find out whether a complex is approved prior to spending too much effort viewing units there.
Owner Occupied Units
Every complex has some rental units. High owner occupancy percentages are better from a mortgage standpoint. High rental rates also tend to be less desirable.
Recurring Fees and Reserves
Most condominium complexes have monthly fees. The fees are for common expenses. A certain portion is also placed into a reserve to prepare for upcoming maintenance. It is important for potential buyers to ask how much the condo fee is, what is covered, the history of changes, and expected changes in the future. Buyers should also ask about the current reserve. If a complex does not have enough to cover a significant repair, all unit owners will be billed for the shortage. This is called an assessment and can be a lot for owners to cover.
Know the Restrictions
The biggest difference between single family and condo homes relates to restrictions. It is necessary to obtain the rules and regulations in advance and determine whether they are acceptable. Rules can apply to both common spaces and interior spaces.
Condominium Purchasing Tips For MA Home Buyers
There are risks to buying any type of listing, but condo ownership has some additional components that buyers must understand. Carefully review all documentation and get help from a real estate attorney for help. Also think about the future market value of units based on the finances of the complex and mortgage qualification. Contact a real estate broker to furnish historical information on sales in the complex. All of this helps buyers develop an informed decision about a condo purchase. This article on condominium purchasing tips for MA home buyers was shared by Peter DaMore at Law Offices of Peter T. DaMore Jr.. Contact Peter at 781-229-7900 or firstname.lastname@example.org for facts on particular complexes in MA or for help with other real estate matters.